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Fixer-upper: New Jersey's housing problems will pose a major challenge for next governor

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Former U.S. Ambassador Phil Murphy.
Former U.S. Ambassador Phil Murphy. - ()

If New Jersey's next governor wants to create meaningful change for its residents, he or she could start by tackling the web of problems causing the state's housing crisis.

Housing problems stem from multiple issues in the state: outdated standards, geographic and ethnic disparities, restrictive regulation and failing infrastructure.

PlanSmart NJ held its sixth annual planning summit on Sept. 14 to discuss the housing crisis and the puzzling problems facing the state.

An example of the complexity of the issues plaguing the housing community is the general sentiment that buying or renting housing is too costly, despite literally thousands of vacancies and foreclosures across the state.

Currently more than 300,000 housing units are classified as vacant, and New Jersey has one of the highest foreclosure rates in the country with more than 78,000 units in some state of foreclosure. With such a huge surplus of supply on the market, why aren’t costs going down?

“There is a dramatic change in socioeconomic wants,” principal partner for Prism Properties Eugene Diaz said. “The idea we’re finding across the U.S. is the most successful communities are integrated in their land use.”

In other words, many affordable housing units are in places where people don’t want to live. Residents’ interests have shifted to convenience. Locations that lack services or public transportation could be facing a death sentence in terms of market viability.

Diaz named Ridgewood as an example of the shift in socioeconomic preferences. Ridgewood is a wealthy town, with access to public transportation, but 43 percent of its downtown area is vacant. This could be potentially caused by the town not offering the same level of convenience or 24/7 services as multi-use developments that incorporate housing, retail and offices in a dense location.

Governor candidates not in attendance

PlanSmart NJ’s Planning Summit was meant to give gubernatorial candidates, Republican Kim Guadagno, New Jersey’s Lieutenant Governor, and Democrat Phil Murphy, a former ambassador and businessman, the opportunity to speak about housing problems in the state, but both candidates were unable to attend due to memorial services held for State Senator Jim Whelan in Atlantic City.

In their place, Assemblyman Daniel Benson represented Murphy’s campaign and Acting Executive Director of New Jersey Business Action Center Gerry Scharfenberger represented Guadagno’s campaign.

Both representatives shared prepared statements from the gubernatorial candidates.

The market’s interest in denser locations may suggest that developers should embrace denser municipal plans, but this solution is met with political gridlock on the local level.

Bearing some of the highest property taxes in the country, New Jerseyans reliably resist new housing developments, fearing more apartments would bring more kids, which would burden local schools and lead to higher property taxes.

“People aren’t against affordable housing, they are against how it affects their community,” Assemblyman Daniel Benson said.

Benson added that increased density doesn’t necessarily have to follow the same model in every municipality. Many towns have developed town centers that attract all age groups. These centers satisfy younger residents’ interests in community hot spots while retaining older residents’ desire for a suburban atmosphere without a busy downtown area.

Lt. Gov. Kim Guadagno.
Lt. Gov. Kim Guadagno.

Although many residents oppose high density for economic reasons, occasionally the banner of “against density” is a substitute for segregation.

“I’ve been in municipalities who’ve been using [density] as code for ‘we don’t want those people here,’” partner and director of government relations for Canoe Brook Devra Goldberg said. Goldberg added that the most creative expression of these concerns was when a resident worried an apartment complex would change the “complexion” of their town.

But the “complexion” of New Jersey has changed dramatically in the past 20 years. Since 2000, the white population of the state dropped 8 percent with roughly 463,000 white residents leaving the state. In their place rose Hispanic and Asian populations, which added 570,000 (51 percent increase) and 322,000 (67 percent increase) respectively.

As of 2010, Union, Passaic and Hudson are all majority-minority counties. The state of New Jersey is anticipated to become a minority-majority by 2030, a trend consistent across the United States.

“Without immigration, this state would be in really bad shape,” executive director of PlanSmart NJ Stephen O’Connor said.

Even in dire situations, New Jerseyans are not always ready to accept change when it’s needed, he suggested.

Diaz recalled Prism’s development of the Thomas Edison factory complex in West Orange, a 100-year-old building that he described as “literally crumbling onto the street.” Construction on the site was delayed for over a decade by litigation and challenges by locals who opposed more apartments in town.

“Part of what we need to do as a community [is] educate the public,” executive director of New Jersey Housing Mortgage and Finance Agency Anthony Marchetta said.

Marchetta stated that “affordable housing” is sometimes associated with “public housing,” creating a knee-jerk reaction to any development plan that includes a sizable number of affordable units. Marchetta said the quality of affordable housing units is comparable to plain vanilla market rate housing.

That distinction hasn’t penetrated the public consciousness yet. Markets have shown there is a lot of interest in mixed-use facilities that include all types of housing along with retail, services and transportation, but these developments are opposed by residents who conflate “affordable” with “public.”

New Jersey may be forced to learn quickly and embrace mixed-use development. Lackluster infrastructure accommodations have throttled the viability of commuting to or from New York for work.

Diaz said the situation is more serious than some may realize.

A pursuit for more bus routes in Jersey towns revealed that the Lincoln Tunnel is at-capacity. Even if the tunnel added more lanes, there’d be no place to house the additional vehicles. Port Authority already services at least one bus every eight seconds. Short of a renewed bi-state initiative or national infrastructure plan, these issues will only grow over time.

The panel’s bottom line? With thousands of vacant units devaluing by the day, towns that don’t want to build the market’s most successful units and infrastructure that can’t support residents’ interests, New Jersey’s housing crisis is a complicated web of problems waiting for the next governor to address.

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Arthur Augustyn

Arthur Augustyn


Arthur Augustyn grew up in Massachusetts and previously covered the video game industry in Los Angeles, city politics in Malibu, California, and local news in Bergen County before working at NJBIZ. He currently covers education and politics.

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